Cheat Sheet Q&A:


Topic:  Medical cost considerations


Today’s entry (in response to my story yesterday regarding 93% of medical care rising in cost above the rate of inflation):

Before you go berserk about medical costs, you need to research why those costs are so high.  My wife works for a local surgeon.  Before the opening of business on each January 1, malpractice insurance must be paid.  How about factoring in the cost of education for the doctor and a nurse?   Consider the amount of “free/unpaid” services doctors “give” to the community. 

Another impediment to lowering costs is the ridiculous rules promulgated by the “Joint Commission”.  This certification group has driven costs up year after year by their irresponsible actions. 


Bottom Line:  This note was an instructive reminder to me.  While I’ve extensively researched and reported on this topic for well over a decade there are consistently new listeners that come into the fold that aren’t familiar my research and reporting on this topic.  Every time I address this topic I do get a fair measure of pushback (often from people in the health insurance market or occasionally medical service providers).  So here’s a summation of some of my research addressing this topic: 

  • Healthcare costs have risen above the rate of income growth for 26 consecutive years
  • Medical malpractice related cost account for about 2% of all medical care costs
  • 98% of healthcare that’s paid for is billed to a 3rd party (health insurance company / Medicare)
  • The range of cost variance for the same procedures within the same geographic are routinely 90%

What I’ve determined over time is that if we were to shift to a health insurance model that resembled the auto or home insurance market we’d be able to turn the tide of ever increasing health care cost.  If you have maintenance and smaller repair needs for your home or car you pay for it yourself.  If you have a major issue such as a car accident or storm damage you file a claim with your insurance company.  


If we were similar consumers of health care we’d ask more questions regarding tests, exams, costs, etc.  It would benefit the medical service providers that are good operators.  It would expose those who do try to take advantage of the system.  It would introduce market forces into an industry that is little more than a game and negotiation between medical service providers and insurance companies (Medicare included).  Reforms on malpractice, regulation, etc are all valid and would help as well but alone they are issues on the periphery of the much bigger issue regarding the ever rising cost of healthcare.  I can’t see how any honest medical service provider would have a problem with their patients being more informed about their care.  I can clearly see how those taking advantage of patients and the system would…


If you have a topic or question you’d like me to address email me:


Audio Report:




Lodging taxes just hit a record high in time for summer vacations - what to know:


Bottom Line:  Have you ever found yourself looking at the final bill for your hotel stay wondering how it ended up costing so much?  If you have it’s getting worse.  If you haven’t you might be taken by surprise. 


The average lodging tax just hit a record high of 13.4%.  Just in time for the summer vacation season.  So for the ease of conversation, if you are staying in a $100 per night room the cost is actually $113.40 before any other taxes and fees.  Local Governments continue to seek additional revenue by raising taxes in seemingly the less intrusive way than taxing their local citizens.  If you’re the visitor however it can really sneak up on you.  In essence if you’re budgeting for a week’s vacation you will likely be paying for an extra night’s stay in the form of taxes this year. 


Audio Report:



We're missing the boat on housing:


Bottom Line:  According to new research from the MacArthur Foundation 43% of Americans believe that owning a home isn’t a good investment.  That’s a large number but it’s understandable. 


In reviewing this information I thought of the many Americans who had their lives forever changed during the Great Depression.  Many people, my Grandmother included, never fully trusted the US banking system again due to living through the economic destruction during the early 30’s.  It’s understandable that the Great Recession would also greatly alter the thoughts of this generation.  It’s unfortunate however. 


From other research we know that about half of adults aren’t confident investing in the stock market.  That’s unfortunate because it’s far and away the best performing investment class historically with a 9% average annual rate of return.  The second best performing class is real-estate at 4.1%. The average American’s most valuable asset is currently their home equity.  If you don’t ever have any equity – then what? 


So we’re demonstrating that we want to avoid the two best paths for wealth accumulation.  That doesn’t bode well for the future.  With regard to home ownership it’s even more unfortunate because if you permanently rent you’ll never have anything to show for all of those years of payments.


Audio Report:



Educate your kids before higher education:


Bottom Line:  Sexual assaults on college campuses have reached a point of crisis in many schools around the country.   60 colleges are now under a Federal investigation due to the prevalence in the numbers of assaults being reported.  Based on the findings thus far from the organization charged with researching this issues, the CSA or Campus Sexual Assault Study, we having pretty alarming information. 

For the purposes of this report I wanted to focus just on the less subjective and most severe form of assault – physical sexual assault.  So in these colleges that are under investigation here are some of the findings regarding physical sexual assault:


  • 14.8% of college students had been a victim (ranging from improper touching to rape)
  • 11.1% were incapacitated at the time of the assault
  • 4.7% were forced assaults

Pretty stunning numbers right?  So who are the victims?


  • 99% of the perpetrators were men
  • 95% of victims were women
  • 90% of the victims knew the person who assaulted them
  • Freshman and Sophomores account for the majority of the victims

So you can put together the profile of the typical victim.  They are young female students who are significantly under the influence and are taken advantage of by one of the people in their circle of “friends”.  It’s important that we educate our daughters about the danger of losing control of ourselves in a party situation.  Having a hangover the next day is the least of the concerns of so many victims.


Audio Report: